Making Money in Mobile by Alex Moir

Press release – January 7, 2011

By Alex Moir, OpenMarket for M & M Global

The next 12 months will bring new opportunities for brands to engage with their customers through mobile.

With the arrival of in-app billing in the mobile payments market, 2011 can be regarded as the year that Direct to Mobile (D2M) billing will provide consumers with the simplest and most convenient way of paying for both app purchases and in-app purchases for their smartphones.

Throughout 2011 there will be a growing realisation that while apps are important, most apps have no value for the consumer. The key is to provide potential customers with content they are willing to pay for and, in order to capitalise on this brands will have to develop unique content combined with in-app billing solutions.

OpenMarket organised a Knowledge & Networking seminar in London in December 2010. It looked at the in-app billing opportunities and reviewed the developments made over the past year in direct-to-operator billing for in-app payments and where the market was likely to be headed in 2011 and beyond.

The event featured speakers from the company’s partners like Virgin Media, Three and TigerSpike, alongside contributions from social media app developer ScreenReach.

Around 90 delegates from mobile content and application companies, brands, broadcasters and agencies like BSkyB, ITV, MTV, Flirtomatic, Fox Mobile and Sponge, registered to learn, share ideas and discuss how to drive billing for app and in-app purchasing forward.

A poll of the attendees at the seminar found that 93% believed that the Freemium/In-application upselling model will be the most successful app revenue model in 2011, further underlining the need for expanded payment options to become available.

Moreover, a further 85% believed that ease of use in the mechanism which consumers use to pay for their apps, is the most important factor that requires improvement in 2011 in order to prevent application monetisation being hindered. Consumer ease-of-use was considered to be more important than out payments from billing providers, further underlying the uniqueness of the Direct to Mobile (D2M) billing model.

D2M In-App Billing is an essential evolution for the mobile applications market.  As the marketplace becomes more and more overcrowded, it becomes harder to differentiate one developer’s application from another, and stagnation will set in.

D2M In-App Billing will stimulate a new commercial interaction with the subscriber – they download the app for free and as they upgrade, or advance in the app they are charged a specific amount to their mobile phone bill.

Simple-to-use APIs are available to developers to include the D2M In-App Billing feature within their apps across all popular mobile platforms. In 2011 Mobile Operators and mobile cloud computing providers will deploy next generation charging and settlement systems such as those offered by OpenMarket, to ensure secure, authenticated, flexible and easy to use charging functionality.

Social media will continue to play its part, as it has done over recent years, in driving use of the mobile channel by consumers. According to Facebook, more than 200 million users currently access the site via mobile, out of a total 500 million. They will demand an evolution in the way digital goods are paid for (Facebook credits or mobile games, for example) and this will herald a move away from 1st generation mobile content, at the same time driving mCommerce proper.

Growth in mCommerce will also be fuelled by e-retailers like Amazon, Tesco and M&S adopting ‘bill through’ models, offering the customer a seamless mobile payment experience with Paypal or Visa. This will increase the amount of revenue generated via mobile and spur other retailers to offer a formal mCommerce capability to further fuel growth.

MMS will also finally achieve its potential as a powerful marketing and messaging platform. Some brands are already using them in creative ways, paving the way for MMS to become the new viral marketing tool of choice.

2011 is set to become a defining year for mobile marketing. The mobile is becoming a replacement for fixed internet and browsing habits have changed accordingly.

It remains to be seen how the industry will change to respond to this new dynamic but it can be said for certain that payment methods will be at the forefront of any development.